Analysts predict Colorado will be an active mobile sports betting market Howard Stutz, CDC Gaming Reports · November 11, 2019 at 6:15 am Analysts said Colorado’s new legal sports betting market could resemble New Jersey’s in how the activity is transacted. The Rocky Mountain State became the 21st to legalize sports betting last week, allowing casinos in three regions, all of which are roughly a 30-to-45-minute drive from population centers, to operate in-house sportsbooks and mobile sports wagering sites. The deal is similar to New Jersey’s, where sportsbooks operate in the far northern and southern ends of the state, leaving a heavily populated middle untouched. Mobile wagering accounts for roughly 85% of all sports wagers in the Garden State. Chad Beynon, Macquarie Securities Macquarie Securities gaming analyst Chad Beynon told investors following last week’s slim passage of Proposition DD that Colorado will likely see similar results. “We expect this to be a relative constant, and this shouldn’t be different in a market like Colorado, where weather is inclement in roughly 33 percent of the year,” Beynon said in a research note. Colorado’s nearly 40 commercial casinos are clustered in Black Hawk and Central City – 38 miles from Denver – and Cripple Creek – 45 miles from Colorado Springs. In addition to having in-house sports books, Colorado casino operators each receive one “skin” – a term used to describe online casinos – per gaming license. The allowance could lead to a healthy mobile sports wagering business. Beynon estimated Colorado would produce annual sports betting revenues of $214 million. “Some industry consultants have pegged revenue closer to $275 million,” said Beynon. Nevada’s sports betting revenues generated a record $301 million in revenues in 2018. In New Jersey, the state’s sportsbooks generated more than $248.8 million in revenue though their first 15 months of operation. Colorado needs to adopt the framework for legal sports betting by May. Lu Cordova, executive director of the state’s Department of Revenue, said in a statement the agency “will be collaborating with stakeholders to help this industry grow responsibly.” Division of Gaming Director Dan Hartman said Colorado has looked at the experiences other states went through to launch sports betting “in setting the groundwork for implementing best practices, while keeping in mind the unique needs and wants of the Colorado gaming landscape and industry.” The referendum set a 10% tax on sports betting revenue, with the money directed toward funding a portion of the Colorado Water Plan. Global Market Advisors Partner Brendan Bussmann said legal sports betting in Colorado provides “the opportunity to convert the illegal market while bringing new customers into the fold.” The six-month lag time between the vote and launch hasn’t diminished any excitement. “It’s great to see another state legalize sports betting,” William Hill US CEO Joe Asher said in an email. “Providing a licensed and regulated alternative to the black market creates jobs and raises vital tax revenue. I think we’ll see more states choosing this path in the months and years ahead.” The Las Vegas-based sportsbook company operates in seven of the 13 states that currently have legal sports betting. William Hill has a partnership with Reno-based Eldorado Resorts, which owns the Isle of Capri and Lady Luck casinos in Black Hawk. Reno-based Monarch Resorts, which is in the process of completing a $400 million-plus expansion to its Black Hawk hotel-casino, is including space for a sportsbook in the expanded casino. The property is also adding a 23-story, 500-room hotel tower, meeting space and new restaurants. “We look forward to offering both in-person and mobile sports wagering while playing our part in Colorado’s future,” said David Farahi, Monarch Casino Resort’s chief operating officer. Full House Resorts CEO Dan Lee has pegged much of his Las Vegas-based company’s growth prospects on sports betting in Colorado and Indiana. The company plans to add a sportsbook to Bronco Billy’s Casino in Cripple Creek and has deals for its “skins” with three partners: Wynn Resorts, Churchill Downs and the United Kingdom-based Smarkets. The same three companies own Full House “skins” associated with the Rising Star Casino in Indiana, where a sportsbook is scheduled to open Monday. Mobile wagering will start in the coming months, pending regulatory approval. Full House assumes none of the sports wagering risk associated with the skins, but the three agreements will pay the company “a minimum” of $7 million annually through a 10-year lifespan – $70 million. #exclusive – Analysts predict Colorado will be an active mobile sports betting market. –@howardstutz, CDC Gaming Reports. https://t.co/HJgklYHh47 @WilliamHillUS #CDCgaming — CDC Gaming Reports (@CDCNewswire) November 11, 2019 Penn National Gaming operates Ameristar Black Hawk. In August, the company divided up its potential online sports betting “skins” through multi-year agreements with four partners – DraftKings, PointsBet, theScore and The Stars Group. The Colorado casino was not one of the properties listed in the deal. “This legalization should be a positive for Penn and Monarch, as well as Full House,” Beynon said. “We see Full House and Monarch as the two best ways to play the Colorado sports betting market given their small size and the impact online sports gross gaming revenue can have on (cash flow).” Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.